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Manufacturing eCommerce – Manufacturers Investing More

In what operational area are leading manufacturers most increasing spending in the next 12 months? eCommerce had the largest increase, from 2% to 10%!

PwC Manufacturing Barometer including Manufacturing eCommerce

A quarterly survey of US-based executives in large manufacturing businesses captures assessments of the direction of the US and world economies, their company’s performance and expectations on revenue growth, margins, inventory, and costs. In reviewing the PwC July 2016 Manufacturing Barometer Report the plans for investment caught our eye and are tabulated below – blue denotes increases and red denotes deceases.

Manufacturers’ Leading Operational Spending AreasQ1 2016Q2 2016
New product or service introductions55%52%
Research and Development50%40%
Information Technology35%30%
Facilities Expansion18%20%
Marketing and Sales Promotion17%20%
Business Acquisition33%18%
Geographic Expansion20%15%
Internet Commerce2%10%LARGEST INCREASE

The report starts, “In the face of US economic and global uncertainty, US industrial manufacturers report their own companies are expecting a rebound in revenue growth over the next 12 months, through the second quarter of 2017. Nearly four in five (78 percent) are planning for positive revenue growth (up 6 points), with an average forecast of 4.2 percent own company growth, up a half point from forecasts in the prior quarter, but below the pace a year ago (4.9 percent). The report also says, “Increased operational spending over the next 12 months was still high at 80 percent, up 5 points from a year ago.

Our take: we were delighted to read that these manufacturing companies are expecting increased revenue and that they are allocating more to selling online. Our take is that Manufacturing B2B eCommerce is maturing and this change in allocation of spending dollars is one sign of acceleration in that process.

  • A February 2015 forecast from Frost & Sullivan expects total B2B eCommerce sales worldwide to reach $6.7 trillion by 2020, accounting for 27% of all B2B sales.
  • A June 2015 Forrester Research forecast expects US B2B eCommerce sales to reach $855 billion in 2016, totaling 9.9% of all B2B transactions. By 2020, total B2B eCommerce sales in the US are predicted to surpass $1.1 trillion, making up more than 12% of total B2B sales.

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